Almost one-quarter of H-1B visa applications in New York City were denied in the first half of the year, four times the rate in the same period of 2016 under the Obama Administration.

The increase in the city to 24.8% from 6.2% in 2016 even outpaced the tripling of denial rates in the rest of the country as the Trump Administration sought to limit all types of immigration.

“The idea that making it more difficult for people to come here will create more opportunities for the native born has not borne out at all,” said Jeremy Robbins, executive director of New American Economy.

Across the country, President Trump’s promise to upend the H-1B visa process has resulted in higher denial rates for initial applicants. Cities like New York may be experiencing the brunt of higher scrutiny on applications, which is affecting smaller tech and IT companies, widening an already unbridgeable gap in the American workforce.

Higher denial rates in New York City may be the result of a booming start up and tech economy attracting more applicants, with the highest number of H-1B visa recipients from 2010 to 2016, nearly 248,000. But it may be too early to know why the rate is steeper or if the trend will continue.

“It could be an anomaly,” said Zachary Hecht, policy director at Tech:NYC. “I have no indication as to why that is and I’d be hesitant to guess.”

Nevertheless, scrutiny on smaller tech companies that serve off site customers has made it more expensive and difficult to do business. Those effects are also felt across other third-party sectors which depend on these services to manage costs, increase productivity and interact with customers.

“These consulting companies are trying to help others transform digitally so they can compete with other companies, including foreign companies,” said Stuart Anderson, executive director of the National Foundation for American Policy.

But these staffing and outsourcing companies have come under fire for abusing the H-1B visa program in the past. They have been known to pay some of the lowest wages allowed by law and have been criticized for actively replacing US workers.

They probably won’t be hiring from the limited native-born workforce to replenish the dwindling number of H-1B visa holders.

“For the most part,” said Economic Policy Institute’s Daniel Costa, “I think that the outsourcing companies that are getting their denials, their business model is not really to hire U.S. workers.”

Although Costa sees the value in the program, H-1B visa holders are often brought in to do entry-level IT work on a visa that should be supporting the highly skilled. But there should be cautious optimism of a higher standard of applicants, since the Trump administration’s goal is to reduce all immigration.

“I think that the way the administration’s actions around the H-1B visa process have proceeded is not the way this conversation should be had,” said Tech:NYC’s Hecht.

Even so, staffing shortfalls will deepen since tech expertise has integrated into other sectors of the economy and the supply of native-born workers and STEM graduates have not kept pace with demand.

“One of the problems we have is that Americans are increasingly getting more educated. But we’re not going into the right field,” said Robbins.

The effects on H-1B-dependent sectors may negatively impact job creation because it could become more effective to move operations aboard. Visa holders also leave the potential for American workers to snag positions at firms that depend on H-1B workers to operate, but largely, the loss will be cultural.

“Diversity in tech is important,” said Hecht. “A large part of that diversity is people from other countries being able to come and account for their knowledge, their expertise and their viewpoints.”

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